TRADE FINANCE

Finance Partners

Trade Finance

Trade Finance helps facilitate global trade, allowing UK businesses to purchase goods from overseas. 

This is where a lender will make the payment to supplier/s for goods to be shipped. This can cause pressure on cashflow as they will only be able to send an invoice to their customer when they have been delivered and the shipping and delivery times can take months. 

With Trade Finance, the buyer will have terms with the lender of up to 90-120 days before they have to repay them. This will allow time for shipment and delivery to their customer so they can be paid, and then they can repay the lender. 

In summary the basic principles for how this works is:
  • - Business identifies a requirement to make an order
  • - Lender pays the supplier
  • - Business pays the lender the full amount plus the interest or interest only every month 
  • - This can be on a specific basis or a lender will set an approved facility size to determine the level of payments they will fund

There are several benefits to this type of funding: 
  • - Allows buyers to take on larger orders that they wouldn’t be able to pay the supplier for
  • - Give the buyer the ability to take on more customers
  • - Enable growth without cashflow restraints
  • - The buyer can negotiate better terms with suppliers in some instances due to quick payments and/or bulk discounts (this can offset the cost of funding) 
  • - It can work alongside Invoice Finance to fund the full trade cycle

Please contact us if you would like to discuss your Trade Finance options

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